Wind power generation broke a new record last month topping 3200 MW but the real success story for Australia is in the area of solar where the country has the potential to emerge as a global powerhouse.
Claiming the nation is in the midst of an energy revolution, Australian Renewable Energy Agency (ARENA) CEO, Ivor Frischknecht, said Australia has some of the world's best wind resources and at the end of 2013 had 1639 wind turbines spread across 68 wind farms.
Frischknecht said wind energy currently accounts for almost four per cent of Australia's electricity generation. “Wind technology is more commercially advanced than large scale solar in Australia, in part because the Large Scale Renewable Energy Target (RET) supports the deployment of only the cheapest assets, which today happens to be wind,” he said. “Comparatively speaking, big solar is still in its infancy in Australia.”
Speaking at the Australian Solar Council's (ACS) annual conference in mid-May, Frischknecht said solar will be as competitive as wind by the end of the decade. One of the obstacles right now is the cost structure for solar which is more expensive than wind.
“The supply chain is less mature so therefore more expensive,” he said.
The good news is that Australia is already a clear leader when it comes to residential rooftop solar. “There is no other country that comes close to our level of penetration which is 15 per cent nationally and more than 20 per cent in Queensland and South Austalia,” Frischknecht said. “Solar installation costs are now dominated by local costs not modules and inverters.”
Frischknecht said the big game changer in renewable energy will be solar storage. He said it won't be long before storage becomes a compelling proposition, given current tariff structures.
The International Renewable Energy Agency predicts the global market for battery storage will grow from $US220 million in 2014 to $US18 billion by 2023.
“Given our high penetration of residential rooftops, there is an excellent chance that Australia will be a leader in residential storage systems,” he said.
Referring to the 2014 Federal Budget which listed ARENA as one of the government bodies to be abolished, Frischknecht described the last 12 months as “interesting”.
He said ARENA is well and truly open for business and is currently in the process of assessing 116 applications seeking $1.4 billion of ARENA funding for projects worth $4.5 billion.
To date, ARENA has committed $1.1 billion to more than 230 projects across the innovation chain from early stage research to large scale projects on the brink of commercialisation.
“Each dollar of ARENA funding has leveraged about two dollars of funding from other sources,” he said.
With coal prices currently at depressed levels, the strength of Australia's renewable energy sector has never been so important.
Even the local coal industry has stated it does not expect to see a recovery in coal prices for another three to four years. Earlier this year one of Australia's largest coal exporters, Glencore, slashed production by 20 per cent in 2015, which equates to a cut of 15 million tonnes.